Blackham v Entrepose UK

For the purpose of deciding whether a claimant has bettered a Part 36 payment, the court must compare like with like. It must identify what the payment represented, including any interest calculated to the last date for acceptance, and compare that with the judgment sum attributable to the same date. Later interest accruing before trial does not improve the comparison. A further payment to cover accruing interest may reopen the offer and create an unjust costs consequence, so it is not a satisfactory solution. Where the claimant fails to better the payment, the ordinary costs order under CPR 36.20(2) follows unless that result would be unjust.

The claimant brought a personal injury action arising from a workplace accident to his right thumb. The defendants paid £40,000 into court on 12 November 2001, stating that the gross sum included a statutory deduction under section 8 of and Schedule 2 to the Social Security (Recovery of Benefits) Act 1997. The claimant did not accept the payment. At trial the County Court entered judgment for £40,854.03, including interest, but the amount referable to 3 December 2001 was £39,644.71. The judge held that the claimant had not failed to better the payment and awarded him 70% of his costs from that date. The defendants appealed on the construction of CPR 36.20; the claimant cross-appealed against the costs deduction. The central issue was whether the claimant had bettered the Part 36 payment.

1. Appeal allowed; cross-appeal dismissed. The claimant was ordered to pay the defendants’ costs from 3 December 2001 onwards. The cross-appeal costs were assessed at £5,250. The order was subject to detailed assessment of the claimant’s Legal Service Funding certificate and the restriction that the costs order was not to be enforced except by set-off against costs or damages awarded to him.
2. In applying CPR 36.20, the court must compare like with like. It must first identify what the payment into court represented. Here it represented the whole damages claim plus interest up to 3 December 2001. The relevant comparison was therefore the £40,000 payment with the £39,644.71 judgment amount representing damages and interest up to that date. The claimant had failed to better the payment.
3. Later interest accruing between the acceptance date and trial could not be added to the judgment sum for this purpose. To do so would misuse the language of bettering the payment, since the payment was intended to give the claimant money which could be invested rather than remain unpaid.
4. The suggested method of protecting the defendant by making a further interest payment was unsatisfactory. It could expose the defendant to liability for both parties’ costs during the relevant period and would be inconsistent with the overriding objective in CPR 1.1(1).
5. The court preferred a principled interpretation of better in Part 36 to leaving the issue to the discretionary costs jurisdiction under CPR 44.3(4)(c), because discretionary treatment would risk inconsistency. The earlier practice described in the 1999 White Book was consistent with this approach.
6. The claimant’s valuation difficulties, including uncertainty caused by angina and conflicting medical advice, did not make the ordinary order unjust under CPR 36.20(2). He had to weigh the risks of refusing the payment, chose to gamble on obtaining a higher award, and lost that gamble. Lord Justice Buxton added that the judge below had regarded the offer as very reasonable and one that should have been seriously considered. Lord Justice Carnwath agreed with both judgments.

• Court of Appeal (Civil Division) — [2004] EWCA Civ 1109: appeal allowed and cross-appeal dismissed. The order was varied so that the claimant paid the defendants’ costs from 3 December 2001 onwards.
• Nottingham County Court — Judge O’Rorke, order dated 3 February 2004: judgment was amended to £40,854.03, with the defendants’ costs limited to 70% from 3 December 2001. The judge had granted permission to appeal.
• Nottingham County Court — earlier order dated 18 December 2003: judgment had been entered for the claimant; no citation was stated in the judgment.